Part 5 Industry growth and development

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Industry development and promotion of Australian organics is currently fragmented and insignificant.

While the industry has still grown, it is likely to be missing many key opportunities.

Both national and some state governments have been involved—to differing extents between jurisdictions and over time—in efforts to catalyse an organic sector that is sustainable in the long term, market responsive and that makes the most of export opportunities.

The Australian Government is aware of the need for the industry to generate transformative capacity to promote organic farming growth, and has recently offered some seed funding to assist in this regard.

 

Planning for industry development

Peak bodies often play key roles in promoting growth and industry development, other than through directly lobbying governments. Industry development and promotion of Australian organics is currently fragmented and insignificant. While the industry has still grown, it is likely to be missing many key opportunities.

The consultations identified that a new peak body could play many roles in providing industry support and facilitating further industry development. Both national and some state governments have been involved—to differing extents between jurisdictions and over time—in efforts to catalyse an organic sector that is sustainable in the long term, market responsive and that makes the most of export opportunities.

  • The New South Wales Government has invested in a Centre for Organics Research at the Southern Cross University in Lismore. The $4 million investment consists of government funding of $2 million during a five-year funding period to be matched by the University (including through the contribution of staff and facilities). NSW has also identified the need for smart labelling, branding and promotion.
  • The Western Australian Government established the Western Australian Premium Food Centre to identify markets for premium agrifood products. The centre is part of the $4.5 million Food Industry Innovation project, made possible through investment by the State Government's Royalties for Regions program. The centre will support the viability and growth of food and agribusiness with activities to: identify and support opportunities for premium WA agrifood domestic and export market development; investigate supply and demand issues that constrain the growth of this sector; pilot collaborative industry projects to address these issues; and transfer knowledge of premium (including organic and low input) production to existing and prospective producers.
  • The South Australian Government released a funding program for grants of up to $15 000 (with leveraged funding of a contribution ratio of $1 for each $1 grant) to help attain organic third-party certifications. The grants are available to support accessing new or higher value markets for product or contributing to premium positioning and achieving superior prices for product.
  • The Tasmanian Government offers a range of practical tools to assist farmers in considering conversion to organic production including gross margin worksheets that operators can manipulate and determine if there is a benefit in conversion, case studies in the dairy, grain and horticulture industries and provision in biosecurity response planning which accommodates organic producers. There are also a range of financial support incentives for new manufacturing and market development.
  • The Victorian Government provided $1.2 million for organic industry development during 2009‑11. The grant was largely spent on promoting the Victorian organic industry, establishing the value of the industry for Victoria, creating a central database of certified operators, developing an industry strategic plan, and communicating with the sector on key issues around industry development. The program included trade events, conferences, five ‘conversion to organic courses’, and the development of consumer information (“The Benefits of Organic Agriculture”). An industry committee, the Victorian Organic Industry Committee (VOICe), was created to work with government to oversee the roll out of the program.

Recent success in grant funding

On behalf of the industry, the Organic Federation of Australia submitted a grant application to the Australian Government under the Agricultural Trade and Market Access Cooperation program.

On 3 October 2017, AOIWG was advised that the application was partly successful. The Australian Government has agreed to fund up to $100,000k (GST inclusive) to undertake:

  • development of a Market Knowledge Report on premium markets for Australian commodities
  • delivery of a Market Guide for how the organic industry can differentiate their products in competitive export markets
  • analysis of the Market Readiness needs specific to Australian farmers, training and up skilling required and most cost-effective delivery options

This is the second successful grant application for organic industry market access projects under the ATMAC program. The Organic Industry Standards and Certification Council is currently completing a related market access project.

These activities must be undertaken in 2017‑18 and focus on understanding market regulatory and technical requirements for trade for organic commodities. The activities need to assist with breaking down technical barriers to trade for Australian exports and secure new and improved access to premium markets.

The Australian Government decided not to fund the full application. The status of application components is as follows (GST inclusive), contingent on matching industry contributions:

Component

Amount Requested

Amount Offered

Govt

Industry

Govt

Industry

a. AHECC codes and market value survey
Dedicated codes for organic product exports

$275k

$165k

 

$100k+

b. Export strategy
Development of a Market Knowledge Report on premium markets for Australian commodities

$100k

c. Market guide
Delivery of a Market Guide for how the organic industry can differentiate their products in competitive export markets

d. Market readiness
Assess and identify the export market readiness of the organic sector

h. Evaluation
Mid-term and final evaluation

e. Exports strategy
Develop a 5-year Australian Organics Industry Exports Strategy

 

f. Industry summit
Support extension and engagement of the industry in the development of this knowledge and priority setting, a series of workshops on elements b-d and then an Industry Summit to present element e, followed by a final public consultation.

g. Implementation plan
An Implementation Plan for the Australian Organics Industry Exports Strategy

TOTAL

$440k

$200k+

 

It is likely that the $55,000 already raised by the industry counts toward the $100,000+ that the industry needs to contribute to access the full amount on offer by the Commonwealth, but this needs still to be confirmed.

Given that the Australian Government is offering only a third of what was requested, the industry needs to reconsider the structure of its proposal and develop a project plan with the Government.

The project provides a further opportunity to demonstrate industry leadership with respect to one important opportunity identified throughout the consultations: organising and working collectively to grow Australian organic exports. Several opportunities were identified including:

  • establishing an export desk to coordinate trade inquiries and facilitate contacts
  • working to achieve recognition of Australian products and standards in export markets
  • coordinating clusters of SME to generate export ready products
  • forming an export traders association
  • agreeing to use a standard Australian marque on export products
  • working with Austrade on promotions in key markets

The project has the potential to explore a function that could become established as part of the mandate of a new peak body because for value chain development ways of enhancing communication along value chains is valuable. Sometimes active promotion within sectors and markets is needed to overcome constraints to growth. Sometimes there are issues with scale, investment, regulations and specific marketing that a peak body can help overcome.

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